Builders May Be Confident, But Consumers Are Not
Although September experienced a surge in consumer confidence, those levels are back down for the second consecutive month, most likely due to slow job growth and rising COVID-19 cases. December’s consumer confidence dropped down to the lowest level since August, now at 88.6 points, according to the National Association of Home Builders. The Conference Board’s Present Situation Index found a 15.6 point drop in consumer outlook for the present time, while a 3.5 increase in the Expectation Situation Index occurred. More consumers than not said they consider business conditions to be “bad” as builder confidence remains high.
Consumers’ assessment of current business conditions deteriorated in December. The shares of respondents rating business conditions “good” remained fell by 2.8 percentage points to 16.0%, while those claiming business conditions “bad” rose by 4.6 percentage points to 39.5%. Meanwhile, consumers’ assessment of the labor market was also less favorable. The share of respondents reporting that jobs were “plentiful” decreased by 4.5 percentage points, while those saw jobs as “hard to get” increased by 2.6 percentage points.